XTO Energy net income climbs 12%

Natural gas firm buys acreage for $550 mln

SteveGelsi

NEW YORK (MarketWatch) -- XTO Energy on Tuesday said net income rose 12% as it lifted its production target for 2008 and announced a $550 million acquisition for new natural gas fields.

XTO Energy Inc.
XTO, +0.26%
said earnings for the three months ended Sept. 30 rose to $412 million, or $1.05 a share, from $367 million, or 99 cents a share in the year-ago period.

After adjusting for the after-tax effects of a derivative fair value loss, earnings rose to $1.06 a share from 94 cents a share.

Revenue climbed 30% to $1.42 billion from $1.1 billion.

The domestic natural gas producer was expected to earn $1.07 a share on revenue of $1.4 billion, according to a survey of analysts by Thomson Financial.

"We are proud to announce another outstanding quarter of performance, both operationally and financially, for XTO Energy," stated Bob R. Simpson, Chairman and Chief Executive Officer. "In the operations arena, production volumes achieved a new record, beating the high end of guidance by 3%."

The Fort Worth, Texas company is targeting annual production growth of 18% for 2007; it also lifted its production growth target to 17% from 15% for 2008.

XTO Energy cited "our drilling and acquisition success" for its new production growth target, Simpson said.

Separately, XTO Energy said it paid $550 million to buy 24,000 net acres in the Barnett Shale from multiple parties. The acquisitions will initially add about 25 million cubic feet of natural gas equivalent per day to its production base.

"These premier producing assets provide immediate growth and low-risk development inventory for the future," Simpson said. "All in all, the discipline and effectiveness of the Company's capital investment program continues to drive value creation for our shareholders."

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